With market attention locked onto Europe for the past month, the global impact of the flooding crisis in Thailand hasn’t received the attention it deserves, one economist warned Wednesday.

Jimmy Jean, economy strategist with Desjardins Capital Markets, said in a report that investors would do well to watch the developments in the South East Asian nation more closely.

“The impact on global growth could be more significant than what is currently expected,” Jimmy Jean, economist strategist with Desjardins Capital Markets, said. “Thailand is a small economy, to be sure, but a significant player in the auto industry and the top rice exporter.”

The damage has spread to other areas, as well. On Wednesday, Sony Corp. revealed the Thai floods were dealing a blow to operations. The technology company, which has already been struggling from a soaring yen and weak TV sales, slashed its operating profit outlook by 90% for the year, citing the flood’s impact on its camera division.

Mr. Jean points out that the global economy, given the fragile recovery, has limited room for such additional shocks. And the Thailand floods still show no sign of receding. New neighbourhoods were swamped this week, leading to further outrage in a country which has already seen 400 deaths as a result of the record floods.

Mr. Jean says that while March’s Japanese earthquake was a more devastating natural disaster, the global economy in its current state is much less effective at absorbing economic shocks like the Thai flood.

Mr. Jean also points to another economic shock the floods are creating: food price inflation. At a time when food prices remain elevated, the floods have hit Thailand’s crucial rice industry, which along with Vietnam, accounts for two-thirds of the global rice trade.

So far, roughly one-fourth of Thailand’s rice production has been lost, and it could get worse.

All that merits paying attention to Thailand as much as the developments in Europe.

“This is still an unfolding situation, but the impact on global trade and inflation may be greater than expected,” Mr. Jean said.